Apple stock ownership (AAPL) is much more exciting than an impending 4-for-1 stock split, says Wamsi Mohan, technology analyst at Bank of America Merrill Lynch.
To be precise, 10 exciting things in the eyes of Mohan, who provided an ordered list on Friday after the release of Apple’s fiscal third-quarter tax earnings.
“(1) Growth in product revenue despite COVID-19-related store closings and home stay orders during the fiscal third quarter reaffirms our confidence in the rigidity of the installed base, (2) the stimulus benefit shows the continued price elasticity of demand for iPhones, (3) new iPhone the delay creates weakness in September, but rising in the December quarter, (4) management expects the strong performance of Non-iPhone products remain in fiscal Q4, (5) iPad and Mac installed bases attract new users, and growth continues to exceed expectations (6) Services grew more slowly than expected, but margins are biased upward, (7) Apple saw new all-time revenue records in App Store, Apple Music, Video and Cloud services. (8) Solid capital returns (returned $ 21 billion to shareholders in e he first calendar quarter with $ 15.9 billion in buybacks, $ 3.7 billion in dividends), (9) Apple announced a 4-for-1 stock split, (10) the balance sheet remains strong with net cash of $ 81 billion and a strong generation of free cash flow, ”writes Mohan.
The analyst reiterated its Buy rating on Apple stock and moved its target price to $ 420 from $ 410.
SAN FRANCISCO, CA – FEBRUARY 1: The Apple logo is displayed on the outside of an Apple store on February 1, 2018 in San Francisco, California. Apple will report quarterly earnings after the closing bell. (Photo by Justin Sullivan / Getty Images)
Apple shares jumped 7% to a record high on Friday, approaching the tech giant as the first $ 2 trillion market capitalization company. Mohan is not alone in his post-earnings optimism at Apple: Most analysts have come out on Friday with revised upside price targets and full-year earnings estimates.
“For me, this was just a huge quarter,” Wedbush technology analyst Dan Ives told Yahoo Finance’s The First Trade.
Blowout indeed.
Apple posted third-quarter tax earnings about 54 cents ahead of consensus estimates despite the global recession brought on by the COVID-19 pandemic. Total sales of $ 59.7 billion broke forecasts of $ 52.3 billion. Apple experienced growth in all of its geography and product segments. Apple CEO Tim Cook credited the strength of the iPhone as the primary driver of great results.
“It was better than we thought largely because, as we noted in the prepared comments, May and June were much better,” Cook told analysts in a conference call about iPhone performance in the quarter.
